House panel rejects Orleans Parish tobacco tax hike

One of a handful of proposed tax increases that Mayor Mitch Landrieu wants to bring before voters to help dig the city out of its fiscal crisis died in the Legislature on Wednesday, when a Louisiana House committee voted to reject a bill calling for an 80-cents per pack tax increase on cigarettes and other tobacco products within the city.

For the second time, the House Municipal, Parochial and Cultural Affairs Committee voted to reject a bill that would allow the city to ask voters to approve the tax on cigarettes and other tobacco products in Orleans Parish. The committee voted 7-to-8 to reject House Bill 1210.

The tax would have generated an estimated $20 million to $25 million for the city of New Orleans.

“It’s incredibly unfortunate and shortsighted that the Legislature would not let the voters of New Orleans decide how to address very serious problems that we have,” said Andy Kopplin, the city’s chief administrative officers. “If we lack the abilities to raise revenues by something that a lot of people would support, like a cigarette tax, then our choices get more limited, and the likelihood of cuts to public safety and other city services increase.”

State Rep. Helena Moreno, D-New Orleans, who sponsored HB1210, attempted to sweeten the deal by adding an amendment that would have allocated five cents of the tax to other organizations. She proposed that one cent would go to New Opportunities Waivers, one cent to the Children’s Choice Waiver, two cents to the MediFund and one cent to the Department of Health and Hospitals’ Office of Behavioral Health.

“This is money, coming from the city of New Orleans, that will benefit your districts,” Moreno told the committee. “We’re willing to do this because it’s that critical.”

After the vote, she said she’d run out of options to push the bill through.

“At the end of the day, it’s very tough to beat Big Tobacco,” she said. “They lobby very, very strong.”

The bill also was opposed by various retail and convenience store associations.

Natalie Babin Isaacs, director of the Louisiana Oil Marketers and Convenience Store Association, urged the committee to reject the bill, saying it would have a negative impact on local convenience stores and gas station shops.

She noted that people often drive farther to find gasoline that’s only a few cents cheaper, so smokers’ consumer habits would follow the same pattern.

“How could a consumer not consider stopping at another parish or another state?” Isaacs said. “And when they do that, they’re also buying fuel, candy and soda.”

The bill is part of a larger tax package for the city of New Orleans proposed by Landrieu.

On Wednesday, the House postponed debate on House Bill 1083, which would allow for up to a 1.75 percent hotel tax increase, subject to City Council and voter approval.

Another bill, which would allow for a property tax increase for fire and police protection in Orleans Parish, is awaiting debate in the Senate Finance Committee.

The fiscal crisis stems in part from long-term federal consent decrees related to the New Orleans Police Department and the Orleans Parish Prison.

The city could be forced to pay as much as $22 million to improve conditions at the parish jail. The city’s general fund keeps the jail in operation.

In addition, a judge last year ordered the city to pay an extra $17.5 million into the New Orleans Firefighters Pension and Relief Fund. The judge found that the city had shirked its responsibility to adequately finance the fund.